Van Haren Group
Real World Example
Think about this: in 2015, there were 10 billion devices connected to the internet. These devices support anything from personal entertainment and home automation to different business functionalities. Their use is only limited by one’s imagination. By 2020, forecasters are predicting 34 billion devices, including 24 billion IoT (Internet of Things) devices and 10 billion traditional computing devices. It’s also predicted that $6 trillion will be spent on IoT solutions, with organizations being the top adopters. The growth is exponential and will continue, especially when organizations see the IoT improving their bottom line through lower operating costs, increased productivity and access to expanding markets.
1.1 EVERYTHING IS A SERVICE
Today’s society is surrounded by products and services. Across the globe, people consume services, products and functionality at an astonishing rate. In the last few decades, products and services have become more connected to deliver everincreasing functionality and intelligence. Services become an ever-more important part of the required and expected solution.
What’s the impact of all this? Put simply, consumer demand for useful solutions is increasing exponentially and organizations need to be ready to supply those solutions. Solutions include services that provide assistance, advice, help and support. Many of these services and products are enabled by, or only possible because of advances in technology. These are digital services.
1.2 CONSUMERS CONSUME
So, let’s be perfectly clear: consumers consume. They provide the need (or demand) for products and services. There is a need to be fulfilled, which is articulated as requirements, and the consumer is willing to invest in and pay for that functionality, directly or indirectly. Consider public services such as education, health and safety or utilities; these are all necessary and all supported by the consumer, either indirectly via a tax system or by a direct purchase. Additionally, consumers receiving services from a service provider might also be service providers to other consumers, as part of a broader network.
1.3 PROVIDERS PROVIDE
If there is a consumer, there is also a provider. Providers provide. Whether they provide (or supply) services or products, it really doesn’t matter – it is the principle behind the provision that will be our focus in this publication. The principle of providing relies on understanding the consumer. Providing something that the consumer doesn’t want does not create any value for the provider or consumer. In fact, it’s just waste. Unless you are in the waste business, this isn’t a good plan! For products and services to be successful, there must be a benefit for both the provider and consumer. The provider only invests in products and services if they see on-going demand, while the consumer wants to receive value by having their needs met and feel they are getting a return on investment. The value proposition for both parties must be defined and understood.
The service provider needs to monitor this cycle between consumer and provider. Over time, the needs of the consumer and the capabilities of the service provider will change. Service providers must be able to adapt to these changes. The on-going interaction between the consumer (who confirms their requirements) and the service provider (who confirms their capability to provide) are the dynamics of service provision. Value is the outcome – if nothing of value is achieved by either the provider or consumer, the relationship is over. Managing those dynamics within a ‘consume-provide’ environment drives the development of service management and a service culture.
1.4 THE VERISM APPROACH
Every organization is now a service provider. Public or private sector, small or large – everyone is now in the service market. Even organizations that focus on selling products (e.g. retailers) need to provide services attached to those products to be successful (for instance customer service, shipping and returns). In a crowded marketplace, reputation is essential for differentiation and commercial success. Think about the last time you used a comparison site to choose a hotel. Would you choose a hotel with a poor reputation?
It’s not only private sector or profit-seeking organizations that need to focus on services. Services are just as important in public sector environments, where good service can deliver a better experience for consumers or citizens. Value still needs to be delivered, whether financial or non-financial. To be successful, all organizations need to adopt an overall service management approach that delivers what their consumers need.
Definition: Service management
Service management is “the management approach adopted by an organization to deliver value to consumers through quality products and services.”
To be an effective service provider organization, service management can no longer be confined to a single department like the IT department or customer services; it touches every element of the organization. The VeriSM approach is specifically tailored to support an organization – the entire organization – to help them succeed in the world of digital services. When the focus changes to look at service management from the organizational perspective, service providers can start to use all of their organizational capabilities, from IT to marketing, finance to customer service, to deliver value.
The VeriSM approach has been developed in partnership with the global service management community to respond to the changing demands on service management and the impact of digital transformation. In this publication, we are starting a conversation with the service management community and the wider community of service consumers. VeriSM will grow and develop with the community and the VeriSM content will grow and develop in response to feedback. In this first publication, we introduce VeriSM concepts.
∙ Value-driven: focuses on providing value;
∙ Evolving: an up-to-date approach which will continually evolve;
∙ Responsive: facilitates a tailored approach depending on the business situation;
∙ Integrated: helps you fit all the different practices together;
VeriSM helps organizations to define their service management principles. These principles are relevant to all products and services and include areas like security, quality, cost and risk. Service management principles are defined at the organizational level and communicated throughout the organization, acting as ‘guardrails’ or guides for all product and service development and operation. Product and service teams can work with a variety of management practices, but still need to meet the requirements of the service management principles.
VeriSM also helps organizations to evolve their operating model, based on an integrated selection of management practices. VeriSM provides flexibility and responsiveness as opposed to a ‘one size fits all’ approach. This is necessary because all organizations are different, in terms of their size, the types of customers they serve and their culture. VeriSM doesn’t tie organizations to a single management product and it allows the operating model to change when required.
Real World Example
A large global bank uses a VeriSM-type approach to define the service management principles that apply to its products and services. These include the security principles that will allow it to meet its regulatory and legislative obligations. Service management principles affect all aspects of a service, not just those that are enabled by technology. For example, at the bank, customer data is collected as part of their products and services. Whether that customer data is collected via a web form, over the phone or on a sheet of paper, the security principles still apply.
The bank uses its service management principles as part of the VeriSM approach to flex its operating model. This allows it to develop products and services in the most appropriate way, using a range of different management practices. For example, the customer support system that is used in all branches is developed slowly, with new versions going live every six months, aligned to its on-going staff training program. The mobile app it offers to its customers changes much more rapidly, with new functionality released and tested on a daily basis in response to feedback from staff and customers.
The service management principles the bank has defined act as the ‘guardrails’ for both services, while giving the teams who manage and develop them the freedom to work in the most suitable way.
1.5 ADOPTING A VERISM MINDSET
So, how does an organization start to work with VeriSM? In this book, we’ll walk through the VeriSM approach and show you how you can start to apply the VeriSM model in your organization.
The most important part of the VeriSM approach is accepting that service management is part of everyone’s role and an essential organizational capability. There isn’t a VeriSM team, or a department locked away behind a closed door. Everyone at every level of the organization has a role to play.
The other key success factor is to accept the impact of technology on products and services. Digital transformation is changing every aspect of how organizations operate, whether they are large or small, private sector or public sector. All employees need to think in terms of technology-enabled services, rather than ‘IT projects’. Business projects and processes are enabled by technology.
Real World Example
Consider an example of a business process transformed by technology. When was the last time that you waited in line to get a coffee? At many coffee shops, you can now order online via an app and your coffee will be ready and waiting for you by the time you get to the store.
As a consumer, you benefit from getting more convenient access to coffee and save yourself some time. The coffee store (the service provider), gets data it can use to improve its services. This includes information about peak consumption times, opportunities for personal advertising and promotional
marketing and more effective supply chain management – for example, having enough stock, but not being over-supplied.
Finally, we need to accept that as employees of an organization, we are all in this together. It’s not solely the responsibility of an IT department to assess how technology can improve services, just as it’s not solely the responsibility of the customer service team to interact with customers. Every employee of the organization works together to create products and services that support the organizational goals.
1.6 THE VERISM APPROACH
The chapters of this book will introduce you to VeriSM key concepts and the VeriSM model and help you to understand how they can apply in your organization. It’s important to remember that VeriSM doesn’t replace any effective ways of working that you might already have in place. Instead, it shows you how to fit these into an overall organizational context and flexibly adopt different management practices to meet different service management situations.
The contents of this book will show you how to establish your service management principles and then adapt your operating models to leverage the management practices that have evolved to support digital services.
■ Part 1, chapters 2-6 introduce services, service management and their significance in today’s rapidly changing environment;
■ Part 2, chapters 7-15 cover the VeriSM model in detail;
■ Part 3, chapters 16-25 cover progressive management practices and emerging technologies;
■ Chapter 26 then helps you get started.
Throughout the book, you’ll find a number of real world examples and vendor reports to help you put VeriSM into context. Remember, VeriSM isn’t about blindly following so-called ‘best practice’ – it’s about building an operating model that works for your organization.
“During my time as a Cabinet Minister in the Danish government, I’ve seen technology start to permeate all aspects of civil life. For instance, in the way a government can offer services to its citizens, and how it can use data to improve the services it offers to citizens. Digital technology is a strand running through every aspect of government, and we can expect adoption to continue to increase rapidly.
Digital services are now a fact of life. The onset of the service economy means that digital technology is also transforming jobs. As such digital skills needs to be part of everyone’s skill set, starting with what is taught in schools as part of the education system.
VeriSM is an approach for service management that reflects the importance of digital services, and as such it will be extremely valuable for organizations going through digital transformation, as well as useful for graduates looking to join the digital economy.”
Rikke Hvilshoj, CEO, Danish Computer Society